Gillette, Wyo., area sees employment boom since 2005
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October 21, 2006
GILLETTE, WY. - Increasing demand and production, impending retirements and an eye toward future growth that includes two new mines has area coal mines hiring at clip not seen in years.
The 14 mines within an hour's drive of Gillette have combined to hire 1,000 more mine workers over the past three years, according to Mine Safety and Health Administration filings.
Almost three-quarters of those employees were brought on since the middle of 2005 and industry officials said they don't expect the rapid-fire hiring to stop anytime soon.
"There are labor shortages in both the East and the West and we're in an aggressive hiring mode," Steve Leer, chairman and CEO of Arch Coal, told The News-Record recently. "It doesn't matter whether you're in West Virginia or Wyoming."
Arch is the owner of Black Thunder, the largest coal mine in the nation, and Coal Creek, a mine that has hired almost 100 people since it reopened earlier this year. The company, along with Peabody Energy and Rio Tinto Energy America - which together produced more than 300 million tons last year - have hired the lion's share of new employees in the area.
Leer said the hiring will continue because growth in western coal fields is on the rise. Reserves in eastern mines are declining after more than a century of sustained mining, and demand for low-sulfur Powder River Basin coal is increasing among power companies.
Pointing to predictions by the federal Energy Information Agency, he expects U.S. power generation to be increasingly reliant on coal.
Marion Loomis, executive director of the Wyoming Mining Association, agrees. But he points out there are other factors that will contribute to strong hiring.
"I can tell you that as we get deeper, you're going to have to add some additional people and as we expand production," he said.
"And we've got a new mine coming on - two, actually. With Coal Creek coming on and School Creek being permitted, were going to have some growth."
A spokeswoman for Peabody Energy, the company that owns School Creek, said the mine could employ 300 or more people when it ramps up to full production.
"Our employment is growing in pace with our increase in production," Beth Sutton said in an e-mail interview from New Mexico. "Last year, we had record production at our three Powder River Basin mines, which shipped 125.7 million tons, a nearly 10 million ton increase over 2004," Sutton said.
In the same period, the company's annual hiring rate tripled.
Between second quarters 2004 and 2005, the mines hired 64 people. The company added 179 people the next year and now has more than 1,300 miners in Campbell County.
Even as mines get more efficient in their production, as long as demand grows, so will employment at area mines, said Lyle Randen, a former executive with Kennecott Energy, which changed its name to Rio Tinto Energy America.
"I would expect that the growth and demand out of the Powder River Basin is going to remain pretty constant, and I would imagine the growth would remain at 6 to 8 percent per annum," Randen said.
Brady West echoed Randen.
"There's an increase in tonnage, increase in sales and increases in sales bring more people to get the coal uncovered and shipped," said West, mine manager at Buckskin mine north of Gillette.
The deeper seams get, the more people and machinery it will take to get to the coal. But he sees one other thing as well: Hedging against losing employees to other mines.
"You're going to have some attrition," West said. "There's a lot of movement in the Powder River Basin right now."
Randen said to expect continued employment into the future.
"You're going to continue to see an increase in employment, but it might not be as dramatic as in the last couple years," Randen said.
When Leer visited Gillette, he pointed out that Coal Creek would continue to hire as it ramps up to an annual production of 15 million tons a year. He also cited a recent railroad study that predicted Wyoming coal loadouts would reach 600 million tons by 2015.
Last year, Wyoming mines produced just over 400 million tons of coal - more than 95 percent of which came from the southern Powder River Basin.
"There will be a continuous expansion as the market demand develops," Leer said. "It's pretty safe to say there will be continuous employment opportunities at the mines here for a long time."
From 18 to 560
A look at how the employment situation has changed in a Campbell County coal mine over the past 30 years:
• Jan. 6, 1976: "Cordero could be employing a force of 70 people by the end of the year up from a current work force of about 18 people," The News-Record reported in an article that reviewed the year's news from the coal mines. The same article reported the Caballo mine, then owned by Carter Mining Co., planned to employ 150 when it was completed.
• Oct. 1, 2006: Today, Cordero, which has since been combined with the Rojo mine, employs 560 people. Caballo mine now employs 345 people.